1. Field of the Invention
The present invention relates generally to risk assessment and, more specifically, to flood risk assessment.
2. Description of the Related Art
Worldwide, floods may be the number one cause of losses from natural events. Flood risk may be a function of flood hazards (e.g., hurricanes and/or damage to a levee or dam), property exposure to these hazards, and the damage vulnerability of properties during a flood. Comprehensive flood risk assessment and flood loss mitigation planning may need to address these three aspects. In addition, some flood planners may consider alternatives for coping with flood hazards including land-use planning, upstream watershed treatment, flood-proofing buildings, insurance and reinsurance measures, emergency evacuation, and building levees/dams and other structures.
In the United States, floods may account for significant property and business interruption losses affecting thousands of enterprises each year, which may cost more in property damages than other natural disasters. In 2005, the flooding from Hurricane Katrina alone caused over $40 billion in property damage, led to over 1600 deaths, and affected over 250,000 businesses according to the United States Census Bureau. Among federal, public, and private measures on flood loss mitigation, insurance and reinsurance may be a key factor in reducing the financial risk to individuals, enterprises and even whole societies. Mortgage companies, public sector (from the Federal Emergency Management Agency (FEMA) to municipalities), capital markets, insurance, and reinsurance companies may need knowledge about frequencies of floods, flood elevations, and frequencies of flood inundation losses at different property locations in order to underwrite sufficient and comprehensive policies for these properties.
Traditionally flood risk for both residential and commercial properties may have been determined by whether the properties were inside or outside FEMA special flood hazard areas (SFHAs). Whether the property is inside or outside of an SFHA may have been the principle risk factor considered in determining whether to purchase flood insurance. Flood risks associated with properties within and beyond SFHAs may be different. In an SFHA, properties located near flood sources with lower elevations may have a higher flood risk than properties near SFHAs boundaries at a higher elevation. Repetitive loss may occur more often in properties at lower elevations because the flood frequencies at lower elevations may be much higher. Beyond the 100 yr flood zone, properties may also suffer flood damage. For example, based on FEMA records, 30% of claims were from the outside of 100 yr flood zones.